Mercedes car finance.

motorguy

MARKMAKAVELI said:

Not much help in this thread just people looking down their noses saying I told you so, despite not knowing about anyone's individual situations. 

Hope you get sorted Barry anyway. I've emailed them again, it's all we can really do I guess! 

Over on pistonheads there have been various threads running over the years and a small minority sneer at those who have opted to take on a PCP or car finance deal, usually defaulting to the "well you clearly cant afford it".

Ironically, some of those particular people seem to be worst affected so far.  One guy has had to furlough nigh on 20 staff and shut down his business which is now in ruins and may never reopen.  Others have been made unexpectedly redundant.

Very very few people are immune to the impact of this - either directly or indirectly.

Someone else having a payment of £200 a month on a PCP deal is now the least of their worries

motorguy

fred246 said:

They are going to be losing a lot of money because people won't be able to pay and they will go bankrupt and have their cars re-possessed. I don't think they are going to tell everybody to forget their payments. Some people will have more money. I have the same amount of money but have nothing to spend it on. They will probably just continue to get payments from people that can afford it and people that can't pay won't pay. You've bought something that's value is dropping like a stone. It's value will probably drop even faster because of coronavirus. Someone has to pay for that massive depreciation.

Defaulting on a few car payments or having to hand it back or even repossessed does not equate to bankruptcy. 

A lot of people will have hit or will soon hit the 50% marker in their contracts anyway and can hand it back and walk away.  

Also, its not like the finance companies can repossess the cars currently anyway - they currently have lost any capability to do so.  I think whilst they may well take an initial hard lined approach, upon negotiation they'll accept a few missed payments by those hardest hit and they will do their utmost not to repossess cars.

And you are quite correct - someone will have to pay for this depreciation - The finance companies are currently on the hook for it if a car is on PCP / HP or a lease deal for that matter.  Anyone with a PCP deal has the assurance of the GFV, so they can simply hand it back at the end of the term and make any additional loss of value the finance company's problem.  Also anyone with a straight HP deal can opt to hand the car back once 50% of the total cost of the agreement has been paid, irrespective of how much negative equity there is at that point.

motorguy

fred246 said:

Just looking at them on Motorpoint. The vehicle tax rates are really crazy. Some are registered before March 2017 and cost £20 per year. Some are registered after April 2017 and with a list price of over £40K are £465 per year.

Yup.  Those are the cars to avoid.  We had to be careful of that when spec'ing our car as the list price nearly touched £40K with options added, even though the discounted price was far from the £40K.

MARKMAKAVELI

Motorguy, I wonder if you can help. 

My contract seems different to the norm in that it states that I have to basically pay all the remaining balance should I want to end the agreement early.

I presume that's still the case in this situation? 

motorguy

MARKMAKAVELI said:

Motorguy, I wonder if you can help. 

My contract seems different to the norm in that it states that I have to basically pay all the remaining balance should I want to end the agreement early.

I presume that's still the case in this situation? 

Are you on a lease deal?  An HP agreement will have reference to Voluntary Termination rights.  A lease deal will be as you're suggesting?

MARKMAKAVELI

Personal contract hire. Voluntary surrender is what I referenced in my last post so I presume that's still the case but wondered if anything changed given the situation. 

MARKMAKAVELI

I still haven't heard from Mercedes and its been 2.5 weeks. I'm going to have to cancel my payments and hope it doesn't affect my credit rating. Anyone else doing the same? 

From Martin's latest email:

What about car finance – is there any help available?

We've spoken to major car finance lenders (car finance tends to be provided in different ways, such as hire purchase, personal contract purchase and contract hire, where the loan's secured on the car). Many give examples of the options available, such as payment deferrals, reduced payments, payment extensions and payment holidays, but the main message is for you to get in touch with them and they will help you on a case-by-case basis.

The Finance and Leasing Association says "forbearance is a regulatory requirement, so when a customer makes that request, the lender is required to find a solution that works best for the customer, not the lender". It adds the bottom line is that lenders will work with customers to get a solution in place.

Many lenders are experiencing high call volumes and some have even closed their phone lines, only allowing for online contact. Your best bet is to keep trying. 

However, the Financial Conduct Authority (FCA), which regulates car finance, says it will make an announcement next week which will cover what help the car finance industry needs to offer struggling customers. We'll update this guide when we have full information on that.

motorguy

MARKMAKAVELI said:

I still haven't heard from Mercedes and its been 2.5 weeks. I'm going to have to cancel my payments and hope it doesn't affect my credit rating. Anyone else doing the same? 

From Martin's latest email:

What about car finance – is there any help available?

We've spoken to major car finance lenders (car finance tends to be provided in different ways, such as hire purchase, personal contract purchase and contract hire, where the loan's secured on the car). Many give examples of the options available, such as payment deferrals, reduced payments, payment extensions and payment holidays, but the main message is for you to get in touch with them and they will help you on a case-by-case basis.

The Finance and Leasing Association says "forbearance is a regulatory requirement, so when a customer makes that request, the lender is required to find a solution that works best for the customer, not the lender". It adds the bottom line is that lenders will work with customers to get a solution in place.

Many lenders are experiencing high call volumes and some have even closed their phone lines, only allowing for online contact. Your best bet is to keep trying. 

However, the Financial Conduct Authority (FCA), which regulates car finance, says it will make an announcement next week which will cover what help the car finance industry needs to offer struggling customers. We'll update this guide when we have full information on that.

If you could hold off until that announcement you might get a clearer picture of what you can / should do.

Stopping your payments without agreement will (in my opinion anyway) affect your credit status, but i could be wrong.

MARKMAKAVELI

I can't find anything official on this yet and Mercedes still haven't responded. It's been nearly a month now.

Anyone had any response from Mercedes? 

MARKMAKAVELI

MARKMAKAVELI said:

I can't find anything official on this yet and Mercedes still haven't responded. It's been nearly a month now.

Anyone had any response from Mercedes? 

No response for a month now. I'm going to have to pause payment, I'm sure they will call me then. Worried about credit score but nothing else I can do.